I always expect an informed, illuminating take on the marketing tech landscape from Chief Martech, Scott Brinker: After all, he’s largely responsible for the image of that landscape we all see when we close our eyes.
The piece which appeared this morning on his blog, on the ongoing remoteness of consolidation in the marketing tech space, was no exception. Some of the main themes resonated strongly with me, especially the observation that the big marketing cloud players are looking more like platforms, less like soup-to-nuts suites: “Adobe, HubSpot, IBM, Marketo, Oracle, and others now each support and promote integrations with dozens or hundreds of other marketing technology products,” writes Brinker.
That’s a trend I highlighted in my blog, “Are the Marketing Clouds Rolling Away,” towards the end of last year. I offered the additional perspective that one time single-focus vendors (or more or less single-focus), by acting more like platforms, ironically start to look more like suites themselves. One example is Episerver; another might be that prized unicorn Sprinklr (and more on that story shortly).
Brinker also points out that the ongoing proliferation of point solutions (although there’s a possibility that it’s slowing slightly) is best seen as a characteristic “long tail” eco-system. Perhaps the market is consolidating around a few “blockbuster vendors” and a “seemingly infinite trail of ever-more-niche offerings.”
Does this really mean consolidation may never happen? Brinker seems to believe so, because the transition of the bigger players from suites to platforms will continue to encourage the launch of single-point solutions which might profitably be plugged into the bigger hubs.
I’m not so sure.
One thing Brinker doesn’t do — in this piece, at least — is focus on the categories of vendors. His legendary landscape is broken down into a few major categories, like data and content/experience, then into many more sub-categories. It seems to me — and again, it’s something I’ve written about here — that there’s much more consolidation in some of these categories than others. Marketing automation, for example, as a category, does seem to me to be dominated by a handful of brands at the enterprise end, and some other brands at the SMB end.
Sure, we haven’t seen the end of MA start-ups, but I don’t see much motivation for investors continuing to fund entrants into a relatively stable category, unless they have technologies which are truly disruptive and innovative. (Although I haven’t explored the question in depth, I wonder if the same isn’t true of CRM?)
Speaking of truly disruptive and innovative technologies, another factor likely to winnow out the “long tail” is the rapidly growing imperative to bake machine learning into just about any and every new solution. As purchasing decision-makers grow to understand the difference between sophisticated machine (and deep) learning techniques, and bundles of useful but essentially unintelligent algorithms, there will be increased pressure on start-ups to offer the real thing.
Given the time and cost involved in developing powerful machine learning models, and the shortage (and therefore cost) of relevant talent, single point solutions which would have looked bright and shiny just a couple of years ago, might now lack lustre.
There’s also another inherent characteristic of the “long tail,” well described by VC veteran Lewis Gersh in a podcast I recorded last year: Many start-ups are built around a niche technological solution, and don’t have anything approaching the look of long-term viable businesses. Betting on neat tools in the hope they’ll one day be worth plugging into the Oracle or even the Episerver cloud — or end up as a SAP Hybris miscroservice — is betting on long odds.
This is a mature space now. There’s still plenty of excitement just around the corner — relating not just to AI itself, but to its IoT potential — but the space in general, and especially key categories within it, is no longer growing at the pace of 2009-2012.
The top end, as I think Brinker would agree, is stabilizing. The long tail won’t become extinct overnight, but I’m skeptical about the degree to which the long tail will remain “vibrant.”